Management Thoughts for Entrepreneurs

As Entrepreneurs grow their companies, they learn to read financial statements to assess the monetary performance of their businesses.

Reviewing the Balance Sheet (at a point in time) and Statements of Income and Cash Flows (either for a month or year to date) gives them only part of the picture.

What is necessary to better analyze your financial performance is reviewing and assessing trends. If you monitor trends in your financial statements over a period and analyze the reasons for such, you might have a better gauge of what is happening in your business.

Monitoring and analyzing trends in your business could improve your financial performance.

Entrepreneurs have to hire people to grow their companies. What kind of management leaders do they hire? Who should they hire?

In order to keep costs down, there might be a tendency to recruit lower-cost managers who might require a lot of supervision. Is this keeping costs down in the long run? Is the Entrepreneur’s time well spent in managing such leaders?

Entrepreneurs should not be afraid to hire people smarter than they are. Hiring smarter people might be tough on the ego and wallet, but in the long run the company will be much better for it. In fact, hiring smarter people will provide the opportunity to not only learn from them, but also allow the Entrepreneur to focus more time and energy on his/her areas of strength.

Entrepreneurs love to do everything themselves as they start and grow their companies. As they build staff, they do delegate operational responsibilities as required.

However, do they delegate decision-making responsibilities and authority? Is there a clear backup person to whom the growing organization looks to make decisions in the absence of the Entrepreneur? Or, does the company postpone decisions awaiting the return of the Entrepreneur?

It is expected that when the company reaches a certain size, it should be in a position to have a secondary leadership team to run the organization. But what about the period until such a stage is reached?

An Entrepreneur needs to groom a backup person to whom the organization can rely upon and who has the authority to make certain decisions. This allows the Entrepreneur to focus on other issues that may require his/her absence from the business (or even take a vacation!).